NEW YORK (TheStreet) -- The potential breakup of insurance giant Genworth Financial (GNW) is leaving investors unsure of how to value its businesses -- particular long-term care insurance, which is one of its biggest.

Richmond, Va.-based Genworth attributes much of its 64% decline over the past 12 months to its long-term care unit, and investors are especially uneasy with it given the low-interest-rate environment and high frequency of claims, according to Steven Schwartz, an analyst with Raymond James.

"They're the largest player in long-term care, there is no long-term care comparison," he said. "And nobody's even sure if there's even value in it, or if it's no value, negative value, or even so negative it will eat through any capital that supports the business."

Shares closed down 2.6% Tuesday at $8.18, Genworth said it would reduce its stake in Genworth Australia by 14% in a share offering through subsidiary Brookfield Life Assurance Company Limited, according to a company statement. The proceeds could be used either to help meet bolster the U.S. private mortgage insurance business or help fund $300 million in debt due in 2016, according to a report Monday from Jefferies analyst Colin Devine.

Genworth said in April that first-quarter net income fell 7% from the previous year, to $204 million, and attributed much of the decline to long-term care, where sales fell by 50%.

"Our lower sales year-over-year in part reflected the impact of the overall long-term care insurance industry sales trends, which were down approximately 22% in 2014," the company said in a statement. Other causes for the drop in revenue were higher pricing on a new product that gives customers more flexibility on long-term care options and distributors suspending Genworth-product sales because of rating-firm downgrades.

Standard & Poor's lowered its rating on Genworth's long-term debt by one notch to BB+, or junk status, in November and to BB- and February.

Genworth has been trying to reduce its debt, possibly with an eye toward spinning off its U.S. mortgage insurance unit as a standalone entity. Hedge fund manager John Paulson had tried to push Genworth to spin out the unit last year, but management resisted and he sold his stake. Genworth management now says it is open to several possible moves to try and unlock value in its business, including the sale of individual business units and taking the company private.

Monday's announcement is the first of several steps expected over the next 12 months, including the sale of the remaining 52% Australian stake, Devine said in his report.

There's a "big argument" in the investment community over the value of the company, with analysts valuing its shares at anywhere between $7 to $12, said Schwartz, of Raymond James.

"There is a lot of different pieces that makes no sense together," he said. "They have Lifestyle Protection [& Mortgage Insurance] in Europe. And the combination of life insurance and mortgage insurance makes no sense. So the company is rationalizing, paying down debt, and hoping they are creating value. It's not dissimilar from theory of Hartford Life."

The Hartford Financial Services Group (HIG) announced it was winding down its wealth management businesses in 2012. It subsequently sold its life insurance business Individual Life to Prudential Financial (PRU) in 2013 for $615 million, according to a Prudential company release, as well as retirement plans to Massachusetts Mutual Life Insurance and its broker-dealer Woodbury Financial to American International Group (AIG).

In 2014, it sold its Japanese annuities business to Japan-based ORIX Life Insurance for $963 million, according to a company report.